Remittances: More than just money

February 12, 2018

Dear Editor,
The Caribbean is all of a region of origin, transit, and destination of extra-regional and intra-regional migration flows, and experiences considerable cases of return migration. Migration has constantly shaped the history of this region.
It is important to stress the heterogeneity of the region, which is reflected on a composition of both large and small islands as well as mainland countries located in South America (Suriname and Guyana) and Central America (Belize). Due to its enormous geographic, historic, cultural, demographic and socioeconomic diversity, the Caribbean is a challenging region to study when focusing on migration and remittances.
The Caribbean countries are primarily receiving countries of remittances. The Dominican Republic receives most remittances by far: US$4.65 billion in total in 2014; then Jamaica received US$2.26 billion, followed by Haiti with US$ 1.9 billion. The United States is the main source of remittances; while, in Europe, Spain (23%) and Italy (21%) are the main European sources of remittances heading to Latin America and the Caribbean (World Bank study Brief 24, 2015). In the Caribbean region, this is mostly destined for the Dominican Republic.
For instance, in Haiti, the Caribbean country most dependent on remittances, the World Bank concluded in 2014 that 21.1% of Haiti’s GDP was derived from remittances. Estimates suggest that the total number of Haitians in that diaspora varied from 1.5 million to 4 million, and research conducted by the ACP Observatory on Migration showed that Haitian families depending on remittances can easily fall into poverty when these flows are interrupted.
As for Jamaica, the country has been dependent on emigrant labour and remains an emigration country; in 2013, having an official diaspora population of 1.098 million people. According to the World Bank’s data from 2014, Jamaica received about US$2.264 billion in remittances, mostly sent from the United States, United Kingdom and Canada. This represents 15% of Jamaica’s GDP, making Jamaica one of the most highly dependent countries on remittances.
Similarly, in Guyana, remittances are significant: a total of 314 million USD in 2014 constituted 11% of Guyana’s GDP. 87% is sent from the U.S. and Canada, and the rest is sent from the UK and other Caribbean nations such as Suriname.
According to a study by the Economic Commission for Latin America and the Caribbean (ECLAC), “Migration and Development: the case of Latin America”, there are different incentives for sending of remittances, such as altruism, solidarity, self-interest (savings), payment of debts, and the diversification of household income and security. Some other researches carried out in Central American and Caribbean countries have shown that 72% of remittances are used to cover daily costs, savings 7%, education 6%, and the acquisition of housing 1.8%.
Monetary remittances have a direct impact on the socioeconomic and employment structure of the Caribbean region. In fact, on a macroeconomic level, they can generate dependency for the Caribbean families, and can probably, and only partially, compensate for the “brain-drain” caused by massive emigration of skilled professionals.
For this reason, it is crucial for this region to develop policies aiming at potentiating the positive impact that remittances can have on development.